Innovation for the Competitive Position of a Firm
Discuss the significance of innovation for the competitive position of the firm. Why is innovation important for business organisations? In what areas of the business might innovation be significant?
Todd McLerie
Innovation is an essential part of business and making the world go around; it is the basis of economic growth worldwide and can allow a firm to overcome limitations in inputs, maximise their resources, and gain an advantage over their competitors (Popa, Preda, & Boldea, 2010). The capacity for an organisation to innovate is represented by its ability to continuously and regularly respond to the changing market and transform knowledge and ideas into new products, processes and systems to benefit both the organisation and the shareholders (Popa et al., 2010). Innovation can allow a firm to reduce their waste, reduce the amount of labour needed to complete tasks and reduce the need for costly or slow machinery, therefore running the organisation more smoothly (Damanpour, 1991). By being innovative and striving to be better, grow more rapidly, and be more profitable than other firms an organisation can build itself up to be the best competitor in their field and therefore a sustainable business in their market (Markatou, 2012). This can be done by identifying and producing new and improved products that competitors do not have, by streamlining work processes and using the best practise, and by engaging in cost leadership and differentiation (Damanpour, 1991). Markets around the globe are frequently changing and rearranging themselves, organisations should always be continually innovating and improving or they risk getting left behind by their competitors (Lyus, Rogers, & Simms, 2011).
Best practise firms are able to respond quickly and efficiently to the constantly changing market and then use this rapid response to their advantage (Alonso-Pauli, & Perez-Castrillo, 2012). In order to be the best competitor in a selected area and achieve a
Todd McLerie
Innovation is an essential part of business and making the world go around; it is the basis of economic growth worldwide and can allow a firm to overcome limitations in inputs, maximise their resources, and gain an advantage over their competitors (Popa, Preda, & Boldea, 2010). The capacity for an organisation to innovate is represented by its ability to continuously and regularly respond to the changing market and transform knowledge and ideas into new products, processes and systems to benefit both the organisation and the shareholders (Popa et al., 2010). Innovation can allow a firm to reduce their waste, reduce the amount of labour needed to complete tasks and reduce the need for costly or slow machinery, therefore running the organisation more smoothly (Damanpour, 1991). By being innovative and striving to be better, grow more rapidly, and be more profitable than other firms an organisation can build itself up to be the best competitor in their field and therefore a sustainable business in their market (Markatou, 2012). This can be done by identifying and producing new and improved products that competitors do not have, by streamlining work processes and using the best practise, and by engaging in cost leadership and differentiation (Damanpour, 1991). Markets around the globe are frequently changing and rearranging themselves, organisations should always be continually innovating and improving or they risk getting left behind by their competitors (Lyus, Rogers, & Simms, 2011).
Best practise firms are able to respond quickly and efficiently to the constantly changing market and then use this rapid response to their advantage (Alonso-Pauli, & Perez-Castrillo, 2012). In order to be the best competitor in a selected area and achieve a